Hillshire Brands Co. (HSH)
February 20, 2013 1:45 pm ET
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Maria Henry - Chief Financial Officer and Executive Vice President
Melissa Napier - Senior Vice President of Investor Relations
Robert Moskow - Crédit Suisse AG, Research Division
Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division
Jason English - Goldman Sachs Group Inc., Research Division
Robert Moskow - Crédit Suisse AG, Research Division
Okay. If we could get seated, we're about ready for our next presenter. Thank you.
My name is Robert Moskow. I'm with Crédit Suisse. And on behalf of the CAGNY board, I want to thank Hillshire Brands for presenting at CAGNY this year, and especially, I want to thank them for sponsoring breakfast on Friday. If you want to see how many Jimmy Dean -- thank you. You should come just to see how many Jimmy Dean sandwiches I can eat at once. The answer is more than one.
Here on stage with us today is CEO, Sean Connolly; CFO, Maria Henry; and Treasurer and Senior VP of Investor Relations, Melissa Napier. Hillshire is a $4 billion company that is the renamed continuing company from the old Sara Lee business, which split up last year. It's a focused meat-centric company, with 2 big brands and significant scale in the packaged meats category.
Sean Connolly has been with Hillshire for almost a year, and his team -- he and his team have developed a 3-year plan to turn this into a growth company. This includes upgrading management capabilities, improving product quality and investing in brand support to become the leader in meat-centric innovation. I've yet to see any specific plans for new and better beef jerky, but there's always hope. And without further ado, here's Sean Connolly.
Sean M. Connolly
Rob, thank you. Well, good afternoon, everybody. It's good to see everybody here in the room. And for those of you who are joining us by webinar, thanks for tuning in. We really do appreciate everybody's interest in Hillshire Brands. I know Maria and I have really been looking forward to getting back together with you and talking more about our strategies and the progress we're making in our effort to create real shareholder value for you.
Before I forget, as you're walking in the door, you may -- hopefully, you received one of these nifty little business card holders. It's quite authentic-looking, quite Hillshire-looking. It's got a logo on it, and inside of that is a gift card so you can buy some of our products. I thought that would be a more practical solution than giving you frozen and refrigerated foods to schlep around in Boca Raton. So please make sure you get that so you can try our great products when you get home.
All right. Let's go into the customary slide on forward-looking statements. Please take a look. All right, let's get into it. Here's what we want you to take away from our presentation on Hillshire today. Hillshire is a terrific portfolio of leading iconic brands, and it is demonstrating right now in the marketplace that it is responsive to investment. We have a growth agenda, and we have a cost savings agenda. And we are making meaningful progress against both of those agendas, and ultimately, what matters most is we are very confident that we can continue to drive significant shareholder value with this company.
Now I've been with the company -- Rob, it's a little more than a year now. I've been with the company about 13 months, and it has been an amazing year. We had a lot of heavy lifting to do this year, and I'm really amazed by the sheer amount of progress we have made in terms of implementing real change to the business. If you think about it, we essentially launched an entirely new company this year, with an entirely new view on how to create value with the assets that we own.
We also built almost an entirely new management team, where just about every person on my team was handpicked for their role because of the skills that they bring to the party. I was looking for terrific operators, number one; and I was looking for people who are intensely competitive and love to win, number two, and I think I got both. And importantly, they're bringing a fresh new perspective to the business. They clearly have fresh eyes, and I hear new ideas around how we can create value from them every single day.
And then just before the holidays, at the end of the calendar year, we made an important move, and that was the move of our headquarters into the City of Chicago. And the reason it was an important move is because we now have our people working in an environment that embodies the way we act and the way we think, which is lean, hungry and interactive. And when you put it all together, it really translates to a market difference in our corporate culture. In a word, it is energized. So it's been an amazing year.
But what really matters is this: the past 12 months, we believe, had validated our core investment thesis. We clearly compete in attractive and profitable categories. And as you're seeing in the marketplace, the key to success with these categories is investment, disciplined investment, and brand-building and innovation, margin-accretive innovation. But we've got to pay for those demand generators, and we will because we have clear opportunities to drive continued cost efficiency. And that will fund our growth. Put it all together, we are very confident that we can generate significant shareholder value with this portfolio.
Now it is early days, but when you look at the data in the marketplace, what you see is that our turnaround efforts are beginning to take hold. What you see here on the slide behind me, on the left, are our product categories. The next column over is our volume percent change versus the prior year, in our fiscal '12, which was our last fiscal year. And on the right, you see our fiscal year-to-date, which we're about halfway through the year. And a couple things you'll notice, we were shrinking, and now we're growing. Last year, we were declining, and the business had been neglected and it really started to show in our performance in the marketplace. We've taken corrective actions, and the business is getting back on track. It's clearly early days, but obviously, I'm encouraged by the progress we are seeing with the business.
So here's what we will cover today. The first thing I want to do, especially for those of you who may be new to our story, is just give you a little bit of background on Hillshire Brands, some facts about the business, as well as the categories that we compete in. Then, we'll spend the bulk of our time today reviewing our 4 key strategies to drive shareholder value and update you on the progress we're making against each of these strategies. And then, clearly, we'll close out with a view on how we think about driving continued cost efficiency and how we ultimately create value for our shareholders with our financial outlook. So that's what we're going to cover today.